Adani Power key beneficiary after Centre eases norms for exporters; Bangladesh-bound power to be sold in India

Adani Power announced on Thursday, August 15, that it is committed to supplying electricity to Bangladesh and that a recent amendment to power export rules does not affect its existing contract. The amendment by the government facilitates connectivity to the Indian grid but does not impose any obligation on India to buy electricity, said the Adani Group's power major.

"Adani Power is committed to fulfilling contractual obligations as per Bangladesh Power Development Board's demand schedule and provisions of the power purchase agreement and would look forward to continuing reciprocal fulfilment," said Adani Power in its statement on Thursday.

Also Read: Amid Bangladesh crisis, Centre eases norms for power exporters

Adani Power to be key beneficiary from export norms

Adani Group's 1,600 megawatts (MW) plant in Godda, Jharkhand, sells electricity exclusively to Bangladesh. The PPA for the power supply was signed between its arm, Adani Power (Jharkhand), and the Bangladesh Power Development Board (BPDB). The plant currently sources coal from the Adani Group's mines in Australia.

The amendment, which governs generators supplying electricity "exclusively to a neighbouring country", enables Adani Power to supply electricity to the domestic market to hedge against political risks in Bangladesh.

The change came nearly a week after longtime Prime Minister Sheikh Hasina fled Bangladesh amid deadly protests triggered by quotas for government jobs, which could benefit future power projects where all output is locked into export contracts.

The Ministry of Power has amended the norms to widen the sources of coal used to generate power for exports and to help generating companies avert losses in case of payment default by neighbouring countries. So far, power generated from coal procured through e-auction, commercial mines, and imports has been allowed to be exported.

The power ministry has also allowed export-focused power plants to sell their power within the country in case of payment defaults under power purchase agreements (PPA). Adani Power would be a key beneficiary of this easing of norms as it is the only exclusive electricity provider to the crisis-hit Bangladesh.

Also Read: Adani Power Q1 Results: Net profit drops 55% to ₹3,913 crore, revenue rises 36% YoY

Adani Power Q1 Results

Adani Power announced its April-June quarter results for fiscal 2024-25 (Q1FY25) last month, reporting a drop of 55.3 per cent in net profit at ₹3,913 crore, compared to ₹8,759 crore in the corresponding period last year. The power major's revenue from operations in the first quarter of current fiscal rose 35 per cent to ₹14,955.6 crore, compared to ₹11,005.5 crore in the year-ago period.

On the operational front, the company's earnings before interest, tax, depreciation, and amortization (EBITDA) rose 76 per cent to ₹6,195 crore, compared to ₹3,514 crow in the same period last year. Margin rose to 41.4 per cent in the June quarter, compared to 31.9 per cent in the year-ago period.

Adani Power's drop in net profit was because the higher fuel costs ate into heatwave-driven demand surge. The company, whose power plants are spread across seven states in the country, said its June-quarter consolidated power sales volume rose about 38 per cent to 24.1 billion units. On Wednesday, shares of Adani Power settled 2.21 per cent lower at ₹673.95 apiece on the BSE.